Presentation on theme: "Chapter 15 Retailing. Introduction An intermediary involved in selling goods and services to ultimate consumers (examples?) Wholesaler Retailer An intermediary."— Presentation transcript:
Introduction An intermediary involved in selling goods and services to ultimate consumers (examples?) Wholesaler Retailer An intermediary that takes title to the goods it handles and redistributes them to retailers, other distributors, and sometimes end consumers Employs 24 million people in the U.S. Accounts for $4.5 trillion to the U.S. economy
STRATEGIC IMPLICATIONS: RETAIL MARKETING STRATEGY A retailer develops a marketing strategy based on the firm’s goals and strategic plans Two fundamental steps: 1. Picking a target market: size and profit potential. POSITION. 2. Developing a retailing mix to satisfy the chosen target market 1. 4Ps + Personnel & Presentation used to create a retail image
Target Market Product Price Place Promotion Personnel Presentation The Retailing Mix
Choosing the Merchandising Mix The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.
Merchandising (Product) Strategy Category management: Retailing strategy which views each product category as an individual profit center. Slotting Allowances: lump-sum payments by manufacturers for stocking new products. Scrambled Merchandising: Combining dissimilar product lines to boost sales volume. Growth of Store brands – Battle for shelf space
Presentation of the Retail Store - Atmosphere The overall impression conveyed by a store’s physical layout, décor, and surroundings. Five Senses.
Suggestion Selling Trading Up Two Common Selling Techniques Personnel and Customer Service
Price Price and payment options : how important? http://www.youtube.com/watch?v=kMimygVTgbU Price and payment options : how important? http://www.youtube.com/watch?v=kMimygVTgbU The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.
HOW THE VIEWS OF THESE STORES' REGULAR SHOPPERS COMPARE Target Neiman Marcus and SaksMacy'sJ.C. Penney Optimistic about the economy in next 6 months 33%35%36%33% Shopping closer to home 38%26%36%44% Shopping for sales more often 42%22%39%45% Spending less on clothing 39%28%35%42% Taking fewer shopping trips 39%11%34%44%
TargetNeiman Marcus Macy's J.C. Penney Age 18-34 104999289 Age 35-64 110112110105 Age 65 and older 69708297 Education high school 82717892 Education college 112115113105 Household size two or fewer 8891 95 Income less than $40,000 63555675 Income $40,000- $99,000 12196116120 Income $100,000 and more 155240186122 Compared to US pop as a whole: 100 is average.
Classification of Retail by 1. Ownership (independent, franchise chain) 2. Service level (Nordstrom vs. Wal-mart) 3. Assortment (CVS vs. Smith’s) 4. Price (Tiffany vs. jewelry kiosk)
Off-Price Retailer Narrow Line PricesLow pricesLow margins Off-price Retailer Low service
Supercenters Broad Moderate prices Low margins Supermarket Low service
Supermarkets Large, self-service retailer with grocery specialty Self-scanning trend: what is your take? Self-scanning trend: what is your take? Competition: fierce, 1% profit on many items
Warehouse Clubs Warehouse club / wholesale club (Sam’s, Costco) No frills, members only (why?) Bulk purchases: price competition, homogeneous shopping goods
Convenience Stores Convenience products Often with gas stations Convenience stores: fill-in your “regular” shopping Competition (fast food also) 24/7 is more important We pay for the convenience
Non-Store Retailing Vending: hi costs; hi prices (flat sales) Vending is a $40 billion U.S. market Cashless vending=wave of future Direct Marketing (Mail, Catalog, Telemarketing) E-tailing (TV shopping, online) M-commerce: buy from mobile devices (e.g., cell phones)
Wheel of Retailing Newer, low-price types of retailing arise to challenge older established “bigger” retailers.
No Frills Motel Motel + Free Breakfast Motel + Free Breakfast + HBO Motel + Happy Hour New Entrant Wheel of Retailing 1 2 3 4 a theory to explain the institutional changes
eTailing and DTC eTail= electronic retail DTC= Direct to consumer Shrinking use of wholesalers? (bypassing wholesalers more and more) eBay: hybrid etailer/online auction site Even sells services online (examples of services on ebay?)
eTail More innovative e-tail sites Printing online www.printresponsibly.com Nike ID http://nikeid.nike.comhttp://nikeid.nike.com Zappos http://www.zappos.comhttp://www.zappos.com
Future of re[E]tailing http://www.youtube.com/watch?v=jtiJaX6q1i0